Digital transformation for SMBs in the post-pandemic world

Digital transformation was a business buzzword before the pandemic, but the last 2 years has changed the playing field drastically. Embracing digital ways of doing business became a necessity overnight. Forced to act, digital transformation became a means of survival for many small and micro businesses who found new ways to trade, new revenue streams and new customers.

While the impact of Covid-19 is undeniable, we look at how it has changed customer expectations. For SMBs, the leap to digital represents an opportunity to thrive – an opportunity that service providers are ideally placed to help with.

Digital transformation in SMBs: pre-pandemic

Before the pandemic, ‘digital transformation’ was a hot topic, something that featured in the business press often. But it was viewed as something that was on the horizon. And while the shift to digital ways of working and doing business was happening, the pace was leisurely. It wasn’t viewed as something that affected every industry, or every type or size of business.

Research commissioned by Cisco suggests that only 4% of eight of the leading markets across Europe, North America and Latin America have reached the advanced stages of digital transformation. Traditional retailers, restaurants and the service industries were perhaps some of the least likely to have made efforts towards digital transformation.

Where digital transformation was taking place, it was largely confined to improving the internal running of a business. For example, moving away from manual processes and relying on digital tools. In 2016, Xerox commissioned a study which indicated that more than 80% of small businesses wanted to eliminate paper from key processes within a year. While the intentions were good, there was an element of choice at play: choosing to make things better, to change the status quo.

Of course, relieving staff of administrative tasks frees them to focus on more profitable activities. Before the pandemic, digital transformation was seen as a way to level the playing field between small businesses and larger corporations. Visa published findings into the Digital Transformation of SMBS, citing many examples of small businesses changing how they work to become more competitive. For example, taking card payments for in-person transactions and selling goods via a website to reach a wider audience and increase revenues.

Digital transformation was underway long before the pandemic. However, it was mainly reserved for those seeking to change the status quo, the pace was gradual, and the motivation less pressing as things continued largely as they always had done.

SMBs’ digital transformation in the early stages of the pandemic

In March 2020, the world changed overnight. Schools and universities were closed, people stayed indoors and hospitals around the world became overwhelmed. Businesses also went into survival mode. Those that were able to trade did so, although the conditions were unlike anything the world had ever known.

Digital transformation in business – and in society

In September 2020, the authors of a Harvard Business Review article wrote that ‘the pandemic has pushed societies to an inflection point where embracing technology is no longer an option but a necessity.’ It communicates how drastically the need for digital transformation had become.

The pandemic wasn’t something that only affected businesses; it impacted all of us, in every area of life. Digital transformation was pushed upon society as a whole. With the whole market forced to rely on digital ways of doing business, small businesses had no choice but to fully undergo digital transformation. Digital was no longer an ‘optional extra’, it was a means of survival.

As populations around the world were confined to their homes, the only means of engaging in normal life turned digital. Shopping, entertainment, even something as simple as buying groceries involved digital intervention. In 2020, ecommerce sales globally accounted for 4.28 trillion USD. In June of 2020, global ecommerce traffic hit a record high of 22 billion monthly visits.

COVID-19 has underlined the need for small businesses to increase and speed up their digital transformation plans. According to research commissioned by Cisco, the ‘crisis has driven over 70% of the small businesses surveyed to accelerate their digitalization.’

Digital transformation at work

The pandemic also changed how we work. Video calls became a feature of daily life. Businesses that relied on a physical space suddenly needed software, IT equipment, and office supplies to power a home-based workforce. Within days, businesses had to adapt to a whole new way of working.

And though the effort was intense, the motivation for digital transformation was far greater than it had ever been before the pandemic. Pre-COVID, the ability to make efficiencies and perhaps trade more widely by selling online were good enough reasons for businesses to embrace digital, if they were motivated to do so. As the world shut down, the threat of not being able to trade at all – regardless of the industry, the size of business and the stage of digital transformation so far reached – far outweighed any resistance to embracing digital. Now digital transformation was a necessity. Technology was needed to survive.

Since the start of the pandemic

Nothing is the same. For small and micro businesses the change represents an opportunity, a chance to outmanoeuvre larger organisations that can’t move as quickly.

The expectation people have as members of society, and as consumers, has changed drastically. People now expect:

  • To be allowed to work from home
  • To buy their favourite goods online, even from smaller retailers
  • They expect to order online and collect in person
  • To order food via an app
  • To book services without having to visit premises or even call anyone

As vaccine programmes around the world progress and society opens up, digital technology will continue to be important. It will help us to keep our distance with contactless ordering in restaurants and cashless payments in stores, for example.

In the early stages of the pandemic, many service industries such as restaurants, beauty, travel and leisure were shut down. Yet it became clear as 2020 progressed that things had changed. Digital ways of being have become ingrained. Customers of any business will expect the digital convenience they have become accustomed to, even from service businesses.

The option to go back to normal does not exist. The best option is to move forwards. Small businesses need more than ever to embrace the tools at their fingertips to help them: website builders, payment software, scheduling applications, and more, to enable them to thrive.

What does the post-pandemic future of digital transformation for SMBs look like?

After two years of such rapid change, who knows how the digital transformation landscape will unfold? The world and the economy may take time to recover from the shock of the pandemic. Yet we’re optimistic. Crises are known for creating opportunity. The world will no doubt see a wave of inventions, both offline and online, in response to the changed landscape. Uber and Airbnb are two spectacularly successful examples of businesses born out of the 2008 crash. Who knows what will be next?

For small businesses, now that the transition to digital has been made, perhaps there will be an appetite for even more innovation. Now that business owners can see the benefits of digital, perhaps they will be open to it, and hungry for more in the future. As customer demands change, small businesses are in a strong position to act quickly and respond.

Service providers have a vital role to play in helping SMBs move forward

Small and micro business owners put their trust in providers to help them run their businesses effectively. According to Cisco’s findings, more than a third (36%) of small businesses prefer to partner with a service provider to help them overcome digital transformation challenges.

The opportunity to help SMBs thrive not only as businesses, but to make the best of the digital world at their fingertips, is huge. If you’d like some support to do that, get in touch. We’ve helped partners empower their SMB customers for over ten years – perhaps we can help you do the same.

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